Snippings

Why do the Americans who own “crypto” own crypto? The Federal Reserve’s Survey and Diary of Consumer Payment Choice (SDCPC) is a long-running data collection effort that tries to obtain a comprehensive picture of U.S. consumers’ payment preferences and behavior. When this survey queried participants in 2022 for their “primary reason for owning virtual currency,” the most popular answer (at 67%) was investment (see chart below, orange rows). The second most popular reason (21%) was “I am interested in new technologies.” It was rare for respondents to list any sort of payments-related use case as their primary reason for ownership. As for lack of trust in banks, the government, or the dollar – all of which are common cryptocurrency themes – these were rarely mentioned in 2022 as a primary reason for ownership.

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So there you have it. The two Federal Reserve surveys put crypto ownership at 9.6% and 8-10% respectively in 2022, while Weber et al peg it at 12% using Nielsen Homescan data. Pew has American crypto ownership at 11-12% by early 2023. And in Canada, the Bank of Canada calculates bitcoin ownership to be at 10% by the end of 2022, while the Ontario Securities Commission pegs total crypto ownership at 13% in early 2022, before much of crypto imploded.

From: Moneyness: Crypto adoption in America.

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Going through the SDCPC data, the majority of Americans who own crypto only have a little bit of the stuff. Out of all U.S. crypto owners surveyed, 45% owned just $0-200 worth of crypto in 2022. This is illustrated in the chart below. The median quantity of crypto held was $312. Given such small amounts, I doubt that these crypto owners qualify as durable crypto adopters, as opposed to folks who’ve jumped on the bandwagon when they saw a Superbowl ad from Coinbase, bought some dogecoin, and have since stopped paying any attention.

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The agency claims that a hacker with the pseudonym ‘pwn0001’ disclosed information about the breach on Breach Forums on October 9. They advertised the availability of 815 million records. Although the government has not officially confirmed the data breach, Resecurity’s HUNTER unit has identified millions of personally identifiable information records, including Aadhaar cards, offered for sale on the Dark Web, belonging to Indian residents.

The data set presented by pwn0001 encompasses various personal information, such as names, fathers’ names, phone numbers, passport numbers, Aadhaar numbers, ages, genders, addresses, districts, pincodes, and states.

From: Massive Data Breach Exposes Sensitive Information of 815 Million Indians on Dark Web.

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< Previous standard      ^ Up a level ^      Next standard >

ISO/IEC 27566 — Information security, cybersecurity and privacy protection — Age assurance systems — Framework

From: ISO/IEC 27566 age verification.

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he was taking out his own money and immediately giving it to a contractor doing visible work. “Cash is legal tender in this country,” he said. “I understand that people hide their income, but I figured that was none of my business. It’s his business.”

From: Why Banks Are Suddenly Closing Down Customer Accounts – The New York Times.

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In the United States, A2A payments have been slow to catch on. One reason is that, in the absence of a regulatory framework, banks have been at a competitive disadvantage in staking out a strong presence in the payments marketplace. Also, Americans love their credit cards and the rewards that come with them, so dislodging the popularity of cards is perhaps the biggest challenge to US adoption of A2A.

From: The role of US open banking in catalyzing the adoption of A2A payments | McKinsey.

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Durbin argues that the European Union limits payment networks from charging more than 0.3% in transaction fees, and that hasn’t eliminated rewards programs. But those rewards are sharply reduced in the EU. To take one example, the Revolut Metal cashback card, offered by a London-based bank, offers 1% for purchases outside Europe, but only 0.1% for purchases inside the EU.

From: Is the Credit Card Competition Act Really Going to Destroy Rewards Programs?.

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What it does show, though, is that there are clear subsidies at play. Someone, somewhere is subsidizing my points habit – no longer the merchant, it is now other BA or Amex customers. Indeed, such subsidies are the most controversial aspect to the model. A 2022 Federal Reserve paper estimates that in the US, credit card rewards induce an aggregate annual redistribution of $15.1 billion “from less to more educated, poorer to richer, and high to low minority areas.” Cardholders with superprime scores typically earn money with the use of reward cards while subprime and near-prime cardholders lose out.

From: The Points Guy – by Marc Rubinstein – Net Interest.

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If the bank has filed a SAR, it isn’t legally allowed to tell you, and the federal government prosecutes only a small fraction of the people whom the banks document in their SARs.

From: Why Banks Are Suddenly Closing Down Customer Accounts – The New York Times.

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By law, banks must file a “suspicious activity report” when they see transactions or behavior that might violate the law, like unexpectedly large cash transactions or wire transfers with banks in high-risk countries. According to Thomson Reuters, banks filed over 1.8 million SARs in 2022, a 50 percent increase in just two years. This year, the figure is on track to hit nearly two million.

From: Why Banks Are Suddenly Closing Down Customer Accounts – The New York Times.

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I’d argue the biggest competitive landscape shift came from creating a new path to banking licenses and giving central bank payment system access.

From: Fintech 🧠 Food – 1033: Open Banking Endgame.

Simon is totally right about this. Open banking did not, by itself, lead to more competition. Instead it led to a pointless bidding war where banks were forced to provide incentives.

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Traders are demanding increased competition with simple and transparent pricing models. This is because the payment market is characterised by a few dominant actors, which affects the price picture: “Payments are quite simply expensive”. The payment methods that traders choose are governed by what customers want to use. Traders prefer faster payments with fewer steps for the customer and that payments can be made in real time. Furthermore, traders are positive to an e-krona that can contribute to increased competition.

From: E-krona study on behaviour and driving forces in the payment market | Sveriges Riksbank.

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